Bhubaneswar, Jan 22 ( Odisha.in ) The motive of politicians and bureaucrats in making money at the cost of the suffering of the poor people of Orissa, while implementing the OHSDP in the State has been evident from selection of ELMARC a virtually bankrupt state government undertaking for playing a key role in selection of medical equipments and fittings as it did not have the required expertise in the matter.
Highlighting the suspicious activities of ELMARC , World Bank’s DIR categorically mentioned, “the acceptance of substandard, dangerous, and non-functional equipment, combined with false certifications, oversupply, frequent installation failures, and a lack of responsiveness to multiple complaints suggest a collusive fraudulent scheme between ELMARC and various suppliers.
While some of the problems observed might be the result of a lack of capacity, there are many indicators that ELMARC was more concerned with preferential treatment of favored contractors than with procuring high-quality equipment and ensuring its effective use.
Consistent with the DIR’s EIF implementation and procurement findings, at least 11 firms complained about bid rigging and corruption in ELMARC’s EIF procurements.
These complaints included the following:
A confidential witness informed the DIR that a relative of an OHSDP official involved in equipment procurement won contracts to provide furniture to the OHSDP.
■ ■ Three firms submitted complaints regarding Narayan Industries’ contract to provide autoclaves. First, a September 27, 2003, complaint alleged that Narayan had bribed ELMARC and OHSDP officials to pass its substandard equipment through inspection.
320 Second, a January 27, 2004, complaint from Hospital Equipment Corporation alleged that Narayan and Variety
Vayapar submitted forged performance certificates so that their autoclaves could pass inspection, and that ELMARC provided them with other bidders’ prices and an opportunity to amend their already submitted bids.
OnApril 7, 2004, complaint from Indian Instruments alleged that Narayan paid a 20 percent bribe for an autoclave contract, provided forged performance certificates, failed to produce pressure test certificates, and used poor-quality steel in its autoclaves.
322 These complaints’ allegations are consistent with the biomedical engineer’s observations that Narayan and Variety’s autoclaves suffered from dangerous manufacturing and design defects.
ELMARC was accepting fake performance and test reports. This is consistent with the DIR’s findings.
■ ■ A November 18, 2004, complaint from Vinar Systems alleged, among other things, that ELMARC awarded Vishala Industries and Royal Safe Company furniture contracts in exchange for a bribe and that Vishala and Royal Safe’s bids lacked performance certificates.
■ ■ A November 27, 2004, complaint from Samar Steel Industries alleged that ELMARC’s Deputy General Manager of Procurement and OHSDP officials accepted bribes from non-responsive bidders—including Vishala Industrial Craft—in exchange for accepting forged documentation and ensuring that substandard goods passed inspection.
The DIR cannot conclude that these complaints’ allegations are accurate because determining their legitimacy would require a full investigation into the facts of each complaint.
However, the complaints are consistent with the DIR’s own findings regarding project procurement and implementation and thus serve as a further indicator of fraud and corruption affecting the OHSDP.
ELMARC Added Accessories to Equipment Contracts, and Thus Increased Their Value, After the Contracts Were Awarded ELMARC’s OHSDP contract provided that, “the requirement of consumables, accessories and spares necessary … and the estimating the cost of the consumables, accessories and spares will be made at the time of preparing the specifications of the equipment.
Despite this provision, ELMARC approved the addition of accessories to four Delta Medical Appliances contracts for the supply of phototherapy units, emergency resuscitation kits, baby incubators, and radiant baby warmers.
These accessories increased Delta’s contract values by more than INR 5 million (USD 111,000), and the DIR found no indication that any other firm received a similar opportunity to add accessories to a contract. Further, the DIR’s field visits suggested that Delta did not supply all the accessories that were added to its contracts.
Thus, ELMARC uniquely approved a significant increase to the value of four
Delta Medical contracts, appears to have received little compliant EIF items in return, and did so in a manner that violated the provisions of its own consulting contract.
This could be the result of poor performance, but given the numerous other indicators that ELMARC engaged in fraud and corruption, these unusual contract value increases are another indicator of fraud.
Other ELMARC Actions Suggested Participation in Procurement Fraud .Two other incidents further suggest that ELMARC may have participated in procurement fraud in conjunction with some of its suppliers. First, in February 2004 the West Bengal DOHFW sent ELMARC a letter warning the firm that Surgicoin’s operation theater lights had “major defects,” including that its bulbs frequently fused.
328 ELMARC also was copied on a January 2004 complaint alleging that Surgicoin was linked to Naresh Grover, an Indian businessman whom the Bank had sanctioned in October 2003 for fraudulent practices.
Despite these warnings, on July 15, 2004, ELMARC awarded Surgicoin an INR 5.4 million (USD 120,000)contract for operating theater lights. ELMARC therefore appears to have awarded a contract to a firm that it knew would provide a poor-quality product.
Second, in May 2005 the PMC tasked ELMARC with reviewing the provision, installation, and use of equipment supplied under the OHSDP. The Bank’s December 2005 supervision mission Aide-Mémoire expressed “serious reservations” about the report’s accuracy.
The Chief Medical Officers at DHH Nawarangpur and DHH Koraput told the DIR that ELMARC’s review consisted only of an inventory of the equipment stock at their hospitals. 330 In addition, Dr. David Porter, who participated in the review on behalf of the Bank, informed the DIR that during the 2006 Joint Equipment Survey, ELMARC engineers admitted to him that senior ELMARC management had instructed them to falsify information in order to provide a more positive view of the project’s progress.”
There are many more evidence against ELMARC’s activities. Though the State Government was aware about such activities since more than an year, inaction of the Government in taking the company and concerned people into task seems to be mysterious.
It is high time that the State Government should come out with clarification as to why they were sleeping over it for long, due to political compulsions or financial pressure ?